A good strategy – but the wrong question?

Imagine a strategy meeting. The agenda looks familiar: competitor analysis, a review of the product and service portfolio, growth targets, people, digital priorities and the role of AI. The discussion is sharp, with plenty of different perspectives. The data is high-quality and up to date. Everything is straight out of the strategy textbook.

The decisions – an updated strategy, development initiatives and a revised market position – have been prepared professionally. Using models that have been around for decades. The same tools your competitors are using.

And yet, a year later, the competitive situation is much the same as it was at the outset, even though the goal was a step change in growth. Market share has moved only marginally. The differentiator that sounded so convincing in the meeting room has remained invisible in the market. The strategic choices were significant, but from the market’s point of view, little seemed to have changed.

The strategy worked, but the results did not. It is a familiar story to most leaders. What is less familiar is the diagnosis of the problem itself.

The issue lies in the question the strategy was trying to answer

How do we succeed in markets that already exist? How do we beat the competitors we have identified? How do we get more out of the organisation?

The lenses through which we view strategy tend to share one fundamental assumption: the market is a given. A constant competitor analysis starts with existing competitors. Market positioning is based on existing categories. Product development starts from the existing offering. Everything is optimised within boundaries that are treated as fixed – as given factors. The company tries to follow changes in the market and position itself within what already exists. The lenses through which we view strategy tend to share one fundamental assumption: the market is a given. A constant.

This is called product-, production-, price- and competitor-oriented thinking. It is widespread, and strongly reinforced by strategic frameworks, tools and courses that have been in use for decades.

Based on the questions being asked, the strategies companies end up with can often be condensed into three alternatives:

The cheese slicer

• Small efficiency gains and cost savings
• Short-term optimisation
• No material change in competitive position

Reconfiguring the organisation

• Internal change and the reorganisation of processes or structures
• Only an indirect impact on the market

Benchmarking the market and competitors

• Doing what everyone else does, only slightly better
• Following and copying competitors’ strategies
• Rarely leads to genuine differentiation

Growth and development do not come from creating more of the same. Growth comes from creating new, superior ideas. Better products and services. The prevailing way of thinking systematically prevents us from asking the one question that matters most – the question that creates real strategy and competitive advantage.

What does the market need that it does not yet know it needs?

The opposite of product- and competitor-oriented thinking is market-oriented thinking. Its essential question is this: what can we create that the customer does not yet know they need? That allows us to add a fourth alternative to the strategy table:

Creating new market value

• A strategy built on renewal and market-oriented thinking
• Creating unique value for customers
• Competitive advantage at the heart of the strategy – and as the foundation for success
• Meaningful differentiation from competitors

To create something new, we have to think in new ways. We have to think beyond what has already been thought. To make sure your strategy is not knocking on the wrong door, consider these three questions at your next strategy meeting:

1. What need emerging in the market has no one yet recognised. This shifts the discussion away from the current offering and towards the genuine latent opportunities the market presents. The question may feel uncomfortable and challenging. But that is where new growth begins.
2. What changes are taking place, particularly in your customers’ operating environment, and what opportunities do those changes create? What are the opportunities that no one has yet named?
3. Aim to create something new that reshapes the market. That is how you avoid becoming a pawn in a game defined by others.

These questions do not replace the strategic planning process. Rather, they improve it by making sure the process is focused on the right problem before the analysis even begins. The point is not to abandon familiar frameworks, but to add another round to the process – one that focuses attention on customers’ latent needs. The question is whether you want to compete in markets that already exist, or aim to create significant new market value.

Market understanding and market-oriented thinking are excellent and inspiring – teammates in doing this. Market-driven thinking is presumably unfamiliar. Markku Vierula is happy to elaborate on his thinking over the phone. This perspective is well suited to sparking inspiring discussion in companies’ boards and management teams. Ask a offer from HTGP for a speaking session.

Our Advisor Markku Vierula is a leading international expert in market-oriented thinking. He has published two books on the subject: Löydä kilpailuetusi, käsikirja strategian ja brändin kehittämiseen, Kauppakamari, 2021, and the international title Find Your Market-Oriented Competitive Advantage – A Toolkit for Strategy and Branding, Springer Nature, 2024. The latter is held by more than 200 academic libraries, including Harvard, MIT, Yale, Stanford, Wharton, Columbia University, Penn State, Kellogg, Bocconi and USC.